If you’re a carrier or transportation provider looking to grow your business in 2022, there’s one sector that should be at the top of your priorities list. In the past several years, sustainability has gone from a high-level, largely theoretical discussion to something that both businesses and governments are intent on solving quickly. Around the world, shippers in all industries are preparing to spend some very serious money on making their operations more efficient, circular and sustainable.
What does this mean for you as a transportation or logistics provider? With nearly a quarter of global energy emissions originating in the transportation sector – a proportion that is only growing larger while other sectors shrink – supply chain is the first place businesses will look as they target aggressive improvements in sustainability over the next several years. This means lots of money coming in for the transportation partners who can provide their customers with both sustainable transportation practices and the expertise needed to implement them successfully.
Simply put, as more large companies focus on slimming down their carbon footprints, they will increasingly turn to transportation partners who can help them achieve these goals, or, better yet, those who are already leading the way. Here is what you need to do to make sure you’re staying on top of this important and rapidly-emerging trend.
Sennder Technologies GmbH is the largest digital freight forwarder in the European full truckload logistics space. Based in Berlin, the company specialises in matching drivers with full truckload shipments, and making sure they get back as efficiently as possible. This means both matching the driver with a return tour, as well as optimising its route planning to account for biofuel stations. Sennder ranks in the top 16% of all companies when it comes to sustainability, according to EcoVadis.
“The market is only growing, and as you heard from some of those out there, we’re looking at targets for 25% green logistics, 50% green logistics. That’s a totally different conversation from 3-5 years ago.” – Graham Major-Ex, Head of Green Revenue, Sennder Technologies GmbH
Sennder’s Head of Green Revenue, Graham Major-Ex, recently joined me for a panel I moderated at the FourKites Supply Chain Sustainability Summit. We discussed how carriers, freight forwarders and other transportation providers can make their operations more sustainable – and how they can help their customers do the same. During the panel, he spoke about how demand for green logistics is skyrocketing among shippers both large and small.
“When I started at Sennder, I got so much feedback from so many people in the industry that nobody wanted to focus on green logistics,” Major-Ex told me. “Everything was 100% price-driven. And I think what we’ve seen is an absolutely exponential growth in the prioritisation of low-carbon [transportation], we have real carbon targets out there from the world’s largest companies, and at the end of the day they’re deciding what services they want to have delivered for them.”
Find Opportunities For Differentiation
All over the world, we’re seeing the birth of a vast and untapped market for logistics providers who specialise in green transportation, and it’s bringing with it a massive opportunity for transportation providers to secure new business both now and in the future.
“None of this is natural or easy. If it were easy we would have fixed this a long time ago.” – Mark Binns, Group Board Director, HOYER Group
As a carrier, freight forwarder or other transportation partner, you should be setting yourself up as a leader in this space. Those businesses that develop an expertise and a reputation in sustainability will guarantee themselves business for years to come.
“My feeling is that organisations are very keen to do something [green], but they want to know how to do it,” said Mark Binns, Group Board Director at HOYER Group and another member of my Sustainability Summit panel. “Emissions is the biggest topic by far, but it’s not the only show in town. Environmental performance, not forgetting about our people, their wellbeing, and all the financial ways one runs their business, and the ethics behind that are somewhere in the long-term sustainability story as well.”
Get Started Now
In conclusion, there’s a huge opportunity for transportation providers who focus on sustainability right now to get in on the ground floor in an industry that will capture an increasing amount of interest in the coming years. As green technology advances and sustainable business practices become more robust, a greater share of new business will go to those who have the experience, expertise and equipment to best deliver a net-zero future.
It’s certainly a difficult problem, however, there are easy ways to get started. As so frequently came up during the FourKites Supply Chain Sustainability Summit, sustainability often comes down to a game of percentages. There’s no silver bullet, and the companies that get started now, even if they make a few mistakes along the way, will ultimately be the ones that are successful 10+ years from now.
It’s Europe where this is happening the most, and it’s Europe that will in many ways continue to lead the way in the years to come. Even so, the US is finally starting to make sustainability an agenda item at the highest levels, prompting companies to look for new ways to track, monitor and improve their sustainability posture. Though many businesses paused their ESG rollouts during COVID, most are starting to reengage in this effort. Those who don’t risk setting themselves up for failure in the long-term by adopting a “wait and see” approach.
But more importantly, it’s logistics where these changes have to happen. Not only is this industry responsible for a large and increasing share of global emissions – it’s also an industry that’s uniquely suited to deal with the vast, complex issues that are at play here.
“That’s what logistics is good at,” says Binns. “We can handle these complexities. This is where we make our living.”
Author: Raj Patel, Vice President, Global Industry Strategy, 3PLs at FourKites